Jamie Smith Hopkins
Center for Public Integrity

This is part one of a five-part story published in partnership with the Center for Public Integrity and USA TODAY.

WATERLOO, Iowa — ReShonda Young strode into a church too big for its congregation, in a still-segregated city where economic barriers often strangle Black ambition, on a mission to tackle a tenacious consequence of American discrimination.

If she could buy this sprawling property, she would be one step closer to opening the only Black-owned bank in Iowa — potentially the first in more than 20 years to launch anywhere in the country. If she could open the bank, she hoped it would provide more tools to shrink the yawning gap between the wealth held in the U.S. by typical white families and most everyone else, Black families especially.

Trying to narrow a wealth gap that’s taken a personal toll is as difficult as it sounds, particularly when the strategy is founding a bank. That requires convincing investors to hand over a lot of money. Young’s target: about $10 million.

On the September day she stepped into the brown-brick Ambassadors for Christ Church, eight months after her first conversation with federal regulators and 17 months after starting down this road, she had commitments for about 5% of the money she needed. 

Credit: Rotor Visual for the Center for Public Integrity

The wealth gap she’s been contending with her whole life did not occur by accident. That white families have eight times the median net worth of Black families, at last count by the Federal Reserve, is hundreds of years of American history contained in a single statistic. It is slavery and Jim Crow and modern-day discrimination, decades of research shows. It’s how all of that translates into the unequal way wealth passes from one generation to the next, with whites nearly three times more likely than Blacks to receive an inheritance.

Young’s grandparents sharecropped in Mississippi under a system designed to keep poor farmers poor — especially Black farmers — and enrich large landowners. As children, her parents worked long hours in the fields, picking cotton, sometimes missing school to do it. 

Her parents and grandparents bucked stiff odds to become homeowners. Even so, there was no money left for funeral costs when her mother’s mother died, and relatives had to chip in. Young contributed the housing portion of her college scholarships and moved back home for the last semester of her senior year.

Two decades later while working at a local investment firm, she learned just how much some of her white peers’ grandparents were able to leave their own children.

The wealth gap between Black and white families today is no better than it was in the early 1960s. 

“My classmates will inherit that, and I think it’s awesome,” said Young, 46. “Unfortunately, that’s not the story for myself and many others.”

The gap, trillions of dollars wide, is so massive that academics who study it say it can’t be closed with anything but a major government intervention. 

Federal actions to narrow it are scattered and collectively small. The grim truth: The wealth gap between Black and white families today is no better than it was in the early 1960s

In fact, it’s larger. 

What do you do in the face of that?

Young’s own answer came bit by bit as she bought homes to rent out, started a business she franchised, survived financial turmoil and helped other entrepreneurs in Waterloo. Over and over, she saw lending decisions that looked discriminatory or unreasonable and placed roadblocks to building Black wealth. A devout Christian, she felt a persistent sense that God was telling her to act.

Her first move was to sue the federal government with three other plaintiffs in 2019, demanding it make financial institutions disclose race and other demographics in their small business loan decisions as a 2010 law required — information critical to finding and stopping discrimination. 

She won. Public release of the data is still likely at least several years away, but the Consumer Financial Protection Bureau is working on enacting that long-delayed rule.

And still, she felt God prodding her. Open a bank.

The gap is so massive that academics who study it say it can’t be closed with anything but a major government intervention. 

It would be the most difficult business launch she’d ever attempted. Even if she jumped all the hurdles, her bank couldn’t by itself defeat the wealth gap in Waterloo, let alone the nation. 

And the gap fights back. Among roughly 5,000 banks in the U.S., the number the federal government says are Black-owned or -led dropped to 19 from 49 in the past two decades because they’ve been starved of capital, making blows like the Great Recession more lethal. The survivors collectively increased their cash and other assets just over 30%, accounting for inflation, from 2001 through 2020. Meanwhile, the country’s 10 biggest banks — beneficiaries of white wealth — saw assets more than triple.

Despite the daunting prospects, Young, a planner and quiet risk-taker, still felt the prodding: Open a bank. She began drawing up a to-do list.

Read part 2: Feeling the Call to Open a Bank
Read part 3: The Wrong Sort of No. 1
Read part 4: Climbing A Steep Mountain
Read part 5: Past, Present, and an Unknown Future

You can hear a podcast about Young’s quest in the newest season of The Heist

Jamie Smith Hopkins is a senior reporter and editor at the Center for Public Integrity, a nonprofit newsroom that investigates inequality. She can be reached at jhopkins@publicintegrity.org. Follow her on Twitter at @jsmithhopkins